Elite Chinese Politics and Political Economy

My name is Victor Shih, currently an assistant professor of political science at Northwestern University specializing in Chinese politics. This blog shares my musing and discussions on Chinese politics and political economy with interested readers. You can contact me at vshih AT northwestern.edu, and my website, where I post my recent research is: http://faculty.wcas.northwestern.edu/~vsh853/

Wednesday, June 10, 2009

More on the disgraced mayor of Shenzhen

First of all, kudos to the Hong Kong press for doing such a good job covering the downfall of the mayor of its northern neighbor. I wish the Western press would cover this story more extensively.

In a way, this is an important story because Shenzhen is supposedly at the forefront of economic and political reform in China. Yet, here we see some of the worst corruption in this thriving metropolis. Beyond the usual millions in bribes, mistresses, and free apartments, Xu also engaged in extensive buying and selling of offices, pretty much the worst kind of corruption one can have in an authoritarian regime. In such a regime, the leaders hold on to power by having the power to appoint and dismiss officials, but if this organizational discipline is being subverted by office selling, it can lead to major compliance issues when central-local interests clash. If it turns out that Xu sold offices, then the "buyers" will also get into trouble, and they may number into the dozens. Thus, a major shakeup may be on the horizon for Shenzhen.

I originally suspected that Zhou Yongkang pursued the GOME case to clean house in the judicial system, but now I am not sure. There are signs that Wang Yang, the party secretary of Guangdong, had a hand in Xu's downfall as Xu was a cadre with extensive Shenzhen connections cultivated by former party secreary Huang Liman-- a Jiang Zemin protege. It is certainly in Wang Yang's interest to remove Xu and install Xu Qin, his protege from his days at the NDRC. If readers know something I don't know, please let us all know!

Disgraced Shenzhen mayor Xu Zongheng had spent millions of yuan trying to buy his way to the top position in the city and had angered many parties with his

arrogant behaviour, sources said.

Mr Xu, who was detained on Friday and taken away from Shenzhen, was accused of scheming to get Shenzhen party boss Liu Yupu's position once Mr Liu stepped down.

Sources said Mr Xu, Shenzhen's first locally promoted mayor, was so keen on advancement he offered bribes to boost his chances of promotion.

One source said Mr Xu got his position as mayor mainly by buying support from different camps.

He grew excited early this year over rumours that Mr Liu, who turns 60 in August, would soon step down and be transferred out of Shenzhen. Mr Liu was later tipped to take over from Chen Shaoji , arrested for alleged corruption, as Guangdong's top political adviser.

Sensing his chance had finally arrived, Mr Xu started an aggressive lobbying campaign to win more support, government sources said.

Once known for his low-key, hard-working image, he had courted media attention in recent months. He appeared on a CCTV talk show in Beijing during the annual National People's Congress session in March, when he boasted of his achievements in Shenzhen. A source said an actress friend of Mr Xu's had arranged for him to join the popular programme.

Government sources said Mr Xu spent most of his time in Beijing during the NPC session building relationships and seeking support. "He has no direct links or powerful patrons in the higher echelons, so he tried to buy his way up," a source said.

The tactic backfired as a number of people he approached later reported him. Mr Xu, who became mayor of Shenzhen in 2005, had also angered powerful parties by being arrogant.

A source from a ministry-level central government organisation in Hong Kong said that in 2006 Mr Xu swapped a reserved land parcel near the Hong Kong-Shenzhen Western Corridor on which the organisation was going to build an office for a strip in a remote suburban area. He then sold the reserved land to a developer. The source said leaders of the organisation were deeply offended.

Shi Dongbing, a dissident writer who claimed he was jailed after being framed by Mr Xu, recently detailed on his blog the corruption allegations surrounding Mr Xu. "Xu has climbed up the power ladder really fast. He has gathered a bunch of henchmen around him and these people have helped him to collect bribes and build connections. His sister-in-law in particular is the one who represents him in these shady dealings."

A bank source said yesterday that senior bank managers had been summoned to a meeting before Mr Xu's arrest by anti-corruption authorities. They were asked to freeze bank accounts linked to Mr Xu as the authorities worried he might try to escape overseas.

A government source also said Mr Xu had an escape plan in case he was exposed. But he was taken down before he could make any move.

Many current and former Shenzhen officials and businessmen are expected to be grilled over their ties to detained Shenzhen mayor Xu Zhongheng.

According to mainland writer Shi Dongbing, writing before the arrest on Friday, Xu has admitted investing a lot to become mayor and many entrepreneurs have ``invested in me.''

His political career was described as a ``rarity'' by mainland media, having left Hunan for Shenzhen in 1993, and been assigned to party affairs before switching to administration, then becoming mayor.

While working for party affairs, Xu trained many officials, although it is alleged several of his relatives have also been appointed to top positions in the Shenzhen municipal government. Shi said Xu's brother-in-law works at the Shenzhen border and his son-in-law is a tax official in Luohu.

Xu's wife is alleged to have received bribes from a property developer, and there have been questions raised over his son's overseas studies.

Guangdong party secretary Wang Yang went to Shenzhen to pacify officials who are not allowed to leave the area because of the Xu investigation.

One claim that could not be verified is that Xu attempted to commit suicide on Sunday.

Xu was linked to disgraced Gome chief Wong Kwong-yu. Questions have also been raised over the Taoyuanju property project, and the building of a stadium for the World University Games _ which will take place in 2011 _ as well as some railway projects.

One of Xu's vice mayors, Xu Qin, has been appointed acting mayor and an official announcement is expected soon.

The central discipline committee has confirmed one more official has been arrested in connection with the Gome case.

Buying and selling office positions are so popular and necessary for officials who eager to get quickly promoted in China's bureaucratic system. Even the 科级 position may cost at least tens of thousand yuan. But that depends. Who knows if any other officials could pay more secretly for that. And it is important to buy off the Right superior, or it's just wasting time and lots of other kinds of energy on the wrong bet. The ways of buying off may be more arranged through financial institutions. For example, officials can offer bank cards and their passwords to the bribed person during some important days for building up relationship. To a certain extent, that kind of behavior is relatively safe, because the government officials normally have close relationship with banking officals.